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Big Fertilizer: Comparing the Major Players' 2Q17 Results

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Part 11
Big Fertilizer: Comparing the Major Players' 2Q17 Results PART 11 OF 11

Which Fertilizer Company Had the Best Phosphate Margin in 2Q17?

Phosphate margins in 2Q17

In 2Q17, phosphate gross margins were mixed for the companies in the chart below. Overall, these gross margins failed to impress investors, and future prospects for the phosphate segment remain bleak as of mid-August.

Which Fertilizer Company Had the Best Phosphate Margin in 2Q17?

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Margin by company

Excluding Israel Chemicals (ICL), the median gross margin of the above three companies in 2Q17 stood at 6%. Mosaic (MOS) saw its margin contract on a YoY (year-over-year) basis, from 10% in 2Q16 to 8% in 2Q17. This contraction was primarily due to falling phosphate prices and weak phosphate demand in 2Q17.

Agrium (AGU) saw its margin expand in 2Q17 to 6%, up from 3% in 2Q16. Unlike Mosaic, Agrium has a vast retail sales channel in the US (MOO), which is more stable than the wholesale channel.

By contrast, PotashCorp’s (POT) phosphate segment saw a negative margin in 2Q17. The company’s phosphate gross margin stood at -11%, compared with -4% in 2Q16.

To be sure, the phosphate fertilizer segments of these companies appear to have been hit the most in 2Q17, compared with the other two fertilizer segments, nitrogen and potash. We will continue to monitor the phosphate fertilizer prices.

At Market Realist, we’ll continue to monitor phosphate fertilizer prices throughout 2017. For ongoing updates, including analyst ratings and recommendations for these companies, keep checking in with Market Realist’s Agricultural Fertilizers page.

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